UK property fund manager buys Grosvenor property for £25m
Stenham, the global fund manager, has bought 52 Grosvenor Gardens for less than half price of its original value, from the Duke of Westminster's property company, Grosvenor Group. The 93,601square foot leasehold was on the market for £57m a year and a half ago.
Paul Arenson, managing director of Stenham Property said: "As a consequence of the turmoil in the financial sector and downturn in the wider economy, we believe value is beginning to return to the UK commercial property sector."
Stenham is dropping rental prices to £30 per sq ft from £40 per sq ft during boom times, in a bid to attract tenants. The £25m purchase price reflects an equivalent yield of 9.4% and a capital value of £267 per sq ft.
Last week Stenham's peer Aviva Investors announced it would sell a portfolio of 47 assets valued at up to £800m. It is selling the mixed portfolio of office, retail and industrial buildings on behalf of the with-profits funds of Norwich Union Life and Pensions, Commercial Union and CGNU Life.
Andy Taylor, Stenham's recently appointed head of UK property who joined last month from investment adviser Hotbed, said as long as you can afford to go long, investors can reap rewards.
He said: "The property presents a number of opportunities to grow income and enhance value through active asset management. The transaction demonstrates that there are now good buying opportunities for investors who have liquidity and are positioned to act quickly with lower reliance on high levels of gearing."
Stenham is one of the of the first property funds to venture back into prime London commercial property, as experts warn of the dangers of going back into the rocky UK commercial market too early.
Last month, chief executive of Grosvenor Group, Mark Preston said: “People talking about green shoots of recovery have been spending too much time looking at the bulbs in their garden,” he told Bloomberg. “By being patient, there will be more compelling opportunities coming in due course.”
UK commercial property values have fallen over 40% since June 2007 according to data compiled by Investment Property Databank.
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